Pioneer Credit Ltd (ASX: PNC) recently upgraded its full-year profit outlook, and what made it even more impressive was that it was the second profit upgrade the company has announced in under a month.
The strong upgrades have caught the eye of the team at Shaw and Partners, which has a bullish share price target for the company.
More on that later, let's see what the company has recently announced.
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Strong operating results
Back on February 18, when the company announced its first-half results, it pulled its first upgrade out of the hat.
The company reported revenue of $47.7 million, up 5% on the previous corresponding period, and a net profit of $10.2 million, which was slightly more than double the same period in FY25.
At the time, and reflecting what the company said was "strong performance", it upgraded its profit outlook for the full year by $2 million to at least $20 million.
Managing Director Keith John said at the time:
At the beginning of FY25 we outlined a clear pathway to our FY26 guidance. By the end of FY25 we were ahead of those expectations, and this momentum has continued. 1HY26 Statutory NPAT exceeded the full FY25 result, reflecting strong strategy execution and delivery on our commitment to shareholders. We are pleased to upgrade our FY26 Statutory NPAT guidance to at least $20m.
The company, which says it is in the business of "ethical debt recovery", had cash collections of $71.4 million for the first half, up 1%, and EBITDA of $51.5 million, up 7%.
Then, just last week, the company upgraded its full-year outlook again to a net profit of at least $23 million.
The company said regarding that upgrade:
The increase reflects the material repricing of both the company's $272.5m Senior Finance Facility and its $55.5m medium term notes (MTN), together with the company's solid operating performance, where 1HY26 Net Revenue was up 5% of the previous half year. These structural improvements materially strengthen Pioneer's earnings profile and capital structure. The MTN repricing delivers approximately $1.75m per annum in pre-tax interest savings. When combined with the repricing of the Senior Facility, total cash interest savings of $2.02m will be realised in 2HY26, with annualised savings of approximately $4.63m from FY27 onwards.
Shares looking cheap
The team from Shaw and Partners said the company was demonstrating to investors that it could deliver in three key areas: cash collections, debt purchases, and free cash flow.
The Shaw team added:
PNC is the only debt purchaser in Australia with agreements in place with all four big banks. Debt recovery is a duopoly with high barriers to entry at the large end of the market. Service providers need established, compliant reputations and financial capacity. It could take perhaps a decade to build a market position that rivals PNC.
Shaw has a price target of $1 on Pioneer shares, compared with 67.5 cents currently.
